Strategists at banks including Goldman Sachs and JPMorgan have turned bearish on the US dollar, after a wave of optimism over the global recovery from coronavirus pushed the greenback lower against its peers.
On Tuesday the trade-weighted dollar slipped to its weakest level since mid-March, continuing a five-day streak of losses. Against the Australian dollar, the US dollar traded at its lowest since January, while it was weaker against the euro and sterling and key emerging market currencies such as the Chinese renminbi.
Goldman, JPMorgan, Deutsche Bank and Citigroup have argued in recent days that the currency’s long rally could be finally over. More than two years of near-uninterrupted gains had come to an end in March but the dollar had remained stubbornly strong, even as the Federal Reserve slashed interest rates to near zero and flooded markets with dollars through international swap lines.